SBV to acquire Viet Nam Construction Bank

A stall of the Viet Nam Construction Bank at a public event. The State Bank of Viet Nam will acquire all stakes of this bank as part of banking reforms. - Photo tccl.info

SBV said the acquisition is essential and stakes will be transferred at a price of zero dong per share. This is based on the law governing credit institutions, regulations on stake acquisition for specially-supervised lenders, and resolutions passed at VNCB shareholder meetings.

An irregular VNCB shareholder meeting to discuss evaluation and capital, as well as its audited financial situation, was held in the southern province of Long An on January 31, the central bank revealed.

An SBV official, who wanted to remain anonymous, told Vietnamplus that the takeover is aimed at helping VNCB strengthen its operations, and the most important goal is to restore the bank's ability to pay money to people, who want to withdraw their deposits from the bank.

"We would rather pay money to gain social stability than leave people losing money, which will cause vulnerability in confidence and social problems that may prove to be even more costly to deal with," the official pointed out.

SBV said the Bank for Foreign Trade of Viet Nam, or Vietcombank, will also take part in managing and operating VNCB. This is likely to help the construction bank succeed in its restructuring schemes and assure the public of its more efficient and secure business performance.

VNCB is being restructured and had signed a comprehensive co-operation agreement with Vietcombank to facilitate growth and sustainability last August.

According to the central bank, its takeover of VNCB will terminate all statuses, including the rights and interests, of existing shareholders in the construction bank. But the legal rights and interests of depositors at the bank will be preserved.

VNCB was established from the Trust Bank in May 2013. The Trust Bank was operational for 23 years with a charter capital of VND3 trillion, or US$142.85 million.

In mid-2014, SBV appointed new officials to the VNCB after some former top executives at the bank were arrested for alleged violation of State regulations.

SBV officials have recently mentioned the possible adoption of strong measures, such as dissolutions, bankruptcies and compulsory mergers and acquisitions for reinvigorating the banking system's health.